This is indeed a worthwhile topic to discuss. My own personal answer to the basic question is "yes," but I freely acknowledge that there's plenty of room for disagreement.
I've talked about small-scale plastic and resin ship models at several of our model club's meetings, and I always start by saying "this particular part of the hobby isn't for everybody." I had the good luck to be born near-sighted. For many years, though I had trouble recognizing friends from across a room, I could do just about any model-related task without magnification. (A standing joke at the maritime museum where I used to work was "You can tell when Tilley's getting serious: he takes off his glasses.") Now, at age 58, the old eyes are having trouble focusing at close range - especially in less-than-bright light. The optician has made me a set of bifocals, and a set of single-vision glasses that are only for closeup work. They help a lot. But there's just no denying that model building isn't as easy, or as much fun, as it used to be.
I can remember when it was customary for experts to pronounce that such things as radar screens were "un-modelable" in scales smaller than about 1/200. To my mind the proliferation of photo-etched parts is one of the greatest developments ever to hit the hobby, and in some respects those parts actually work better in small scales than in bigger ones. (To my eye, at least, 1/350 guardrails often look like strips of metal with holes in them - which, of course, is what they are.) Combined with the increasing number of very-high-quality kits on the market, photo-etched parts create the potential to turn a 1/700 ship model into something resembling a piece of intricate jewelry.
Another factor: money. I'm tremendously impressed by the quality of the latest and best 1/350 kits, but the prices (several hundred dollars for a battleship or carrier) are simply out of my reach. (I might be able to justify such an expenditure if I could tell myself that I'd get to work on the kit immediately and spend a year or two working on it. But the truth is that it would end up in my stash, and if I ever did get around to it I'd probably finish it in a few months - at the most.) I can buy an excellent, state-of-the-art battleship or carrier in 1/700 for $35, plus $15 or $20 for aftermarket parts, and get three or four months' worth of enjoyment out of it. And the finished product will fit in the curio cabinet alongside my other warships. (I'm not sure where I'd put a 1/350 battleship. My wife, normally a very understanding and appreciative woman when it comes to my hobbies, probably would object to putting it on the mantle in the den.)
But the fact remains that anybody who has vision problems, or arthritis, or any number of other physical frailties, is likely to find working in 1/700 scale more frustrating than enjoyable. And such a person shouldn't feel the least bit embarrassed about admitting it, and concentrating on some other phase of the hobby.
I've wondered more than once how the plastic ship kit business might have been different if the aftermarket part business had blossomed before, rather than after, the introduction of the "Waterline Series" made 1/700 a standard scale. (Photo-etching, of course, has been around for a long time, but if I remember right it really started having a big impact on ship modeling in the early eighties. Tamiya, Hasegawa, Fujimi, and Aoshima had introduced the first of the "Waterline Series" kits about ten years earlier.) If they'd anticipated the appearance of White Ensign, Edouard, Gold Medal, Tom's Model Works, etc., would the manufacturers and hobbyists have picked 1/700 as a standard scale? I rather doubt it. Maybe 1/600, the old favorite of Airfix and Aurora, would have been seen as a better idea. I guess we'll never know.
At any rate, the good news is that, for those who can handle the prices, there are plenty of excellent 1/350 kits and aftermarket sets out there. So to each his/her own. I have no idea what the future may hold, of course, but it looks to me like we're in the midst of what will be known for decades to come as a golden age of warship modeling.